Distribution agreement: high brand value product

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A distribution agreement, home or export, set up by a manufacturer of a product with high brand and IP value; examples: FMCG, branded consumer durable, or patent protected industrial product. Many options provide great flexibility for you to craft exactly the deal you want.

About this document

You are a manufacturer of a product with high brand value. It could be FMCG or branded consumer durables, or patent protected industrial product.

This agreement has been drawn to provide an armoury of ideas. You can be tough or tender.

Through this agreement, you sell at home or abroad, to distributors or major retailers. Special terms are required to protect your very valuable brand and IP rights. These provisions affect many aspects of the deal. We have provided a specific licence to cover exactly what your distributor may or may not do.

Apart from the brand and trade mark protection, this is a comprehensive distribution agreement dealing thoroughly with all the issues you would expect it to cover.

We have worded the agreement in ways that seem simple and reasonable, but most provisions are there to safeguard your position and not your customer’s.

The distributor is responsible for all aspects of compliance with local law, whether relating to the product, the customer, importation or duties and taxes.

We have covered product recall, minimum sales requirement, how you want the whole subject of marketing to be approached and how he will report to you. We have provided a “joined up” procedure taking in order > acceptance > delivery > risk > title > payment > returns, and so on.

The contents of this document could be edited in the course of negotiation, but its best purpose is to use as a standard terms document, to which any merchant must sign if he wishes to use your services.

There are over 200 provisions in the document supported by over 3000 words of notes, including those supplied in a separate document. Plain English, our business understanding and thorough care, make this the perfect document for your business.

Selected contents

Setting up the agreement

Appointment of distributor and licence to use intellectual property

Price

Protection of intellectual property

Distributor’s administrative obligations

Distributor’s marketing obligations

Approval of marketing plan and minimum sales

Liaison and reports

Protection of brand

Manufacturer’s obligations

Compliance and regulation

Orders and acceptance

Delivery and transportation

Payment terms, including running credit account and letter of credit

Risk and retention of title

Returns and products defective or not as ordered

Warranty and service policy

Products recall

Disclaimers and limitation of liability

Mutual indemnities

Assignment and change of control

Confidential information

Intellectual property

Duration and termination

Other important legal provisions

Options for schedules you will probably need

Draftsman

This document was written by a solicitor for Net Lawman. It complies with current South Africa law.

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